ABSTRACT Oxygen (O2) is not only an indispensable metabolic substrate in various enzymatic reactions including mitochondrial respiration, but also a regulatory signal that controls stability and activity of !#$transcription factor Hypoxia Inducible Factor-1 (HIF-1), a key mediator of the cellular adaptation to low O2 tension (hypoxia). The fetal growth plate is a unique mesenchymal tissue because it is avascular, albeit it requires the angiogenic switch in order to be replaced by bone. Over the years, we have demonstrated that, consistent with its avascularity, the fetal growth plate has an inner hypoxic region. We have provided genetic evidence that HIF-1 is a survival factor for hypoxic chondrocytes in vivo. We have shown that mesenchymal condensations of the limb bud are also hypoxic, and lack of HIF-1 in limb bud mesenchyme delays differentiation of mesenchymal cells into chondrocytes in vivo. In this grant, we propose to identify the molecular mechanisms that mediate the role of HIF-1 as a survival and differentiation factor in cartilage in vivo. Along these lines, we have reported that viable chondrocytes at the periphery of HIF-1 null growth plates and HIF-1 null mesenchymal condensations of the limb bud are considerably more hypoxic than controls. Moreover, we have provided genetic evidence that the extreme hypoxia of HIF-1 null cells is not the consequence of reduced availability of O2 to the growth plate. Therefore, we hypothesized it had to be the consequence of increased O2 consumption. Our hypothesis is in line with the well- documented ability of HIF-1 to impair mitochondrial respiration in vitro. Based on these findings, we now propose that a key function of HIF-1 is to reduce O2 consumption in cells that are already hypoxic because of limited availability of O2, in order to prevent them from becoming virtually anoxic, a status that is not compatible with cell survival and differentiation. Specifically, we hypothesize that HIF-1 is essential for survival of hypoxic chondrocytes and for timely differentiation of hypoxic mesenchymal cells into chondrocytes by negatively regulating mitochondrial respiration, and thus mitochondrial O2 consumption. We will test our hypothesis by inhibiting mitochondrial respiration in HIF-1 null chondrocytes (Specific Aim I) and in HIF-1 null mesenchymal cells of the limb bud (Specific Aim II) in vivo and in vitro. Moreover, we will establish whether HIF-1 lowers O2 consumption in chondrocytes in vitro (Specific Aim III). Our findings may lead to a paradigm shift if we determine that, differently from what has been reported in the context of well-oxygenated tissues, impairment of mitochondrial respiration is an indispensable requirement for survival and for early differentiation stages of hypoxic chondrocytes. $